Sunday, April 01, 2012

The Ilusion of Intellectual Advantages

The New York Times has an article that relies on the modern media narrative that intellectual innovation is the key to competition. There is actually little evidence this is true in major league baseball.

For instance, the claims that Oakland's use of "moneyball" techniques made it successful are largely contradicted by the facts. Instead, Oakland became successful the old fashioned way. They drafted and signed players like Jason Giambi, Miguel Tejada, Eric Chavez, Tim Hudson, Barry Zito and Mark Muldur. They complemented that core or homegrown stars with relatively cheap veterans. Almost none of these decisions had anything to do with statistical analysis, nor with finding market niches others were ignoring. Since they adopted those "innovative" techniques under Billy Beane, Oakland has not been noticeably successful. Certainly not when compared to the "tradition bound" Twins.

Instead of innovation, teams that have success rely on better execution of established methods. They have better scouts, who do a better job of evaluating a player. They have farm systems that do a better job of developing players skills. They spend money on good players and don't tie up payroll in over-priced failures. They avoid mistakes. Of course if they are the Yankees, they can afford more mistakes than normal markets, but even the Yankees can struggle when they make too many bad choices.

The New York Times focuses on the things of interest to fans. Team budgets and evaluating the players on the field. But the team success may have more to do with how teams are managed. Do they put the best scouts in the field? Do they have a minor league staff that brings out the best in players and trains them to play the game right? Do they have a development philosophy and values that run throughout the whole organization?

There may be some "big ideas" that will help make a difference in getting those results right. But mostly it will depend on the baseball abilities of the top management, attracting the right baseball people and the willingness of the owners to let the baseball people run the organization. Innovative ideas are the least of what is important.